I 

118TH CONGRESS 

2D SESSION H. R. 8860 

To amend the Internal Revenue Code of 1986 to enhance the paid family 

and medical leave credit, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 27, 2024 

Mr. FEENSTRA (for himself, Ms. CARAVEO, Mrs. BICE, and Ms. PEREZ) introduced the following bill; which was referred to the Committee on Ways 

and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to enhance 

the paid family and medical leave credit, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Paid Family and Med5 ical Leave Tax Credit Extension and Enhancement Act’’. 

6 SEC. 2. ENHANCEMENT OF PAID FAMILY AND MEDICAL 

7 LEAVE CREDIT. 

8 (a) IN GENERAL.—Section 45S of the Internal Rev9 enue Code of 1986 is amended— 


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1 (1) in subsection (a)— 

2 (A) by striking paragraph (1) and insert3 ing the following: 

4 ‘‘(1) IN GENERAL.—For purposes of section 38, 

5 in the case of an eligible employer, the paid family 

6 and medical leave credit is an amount equal to ei7 ther of the following (as elected by such employer): 

8 ‘‘(A) The applicable percentage of the 

9 amount of wages paid to qualifying employees 

10 with respect to any period in which such em11 ployees are on family and medical leave. 

12 ‘‘(B) If such employer has an insurance 

13 policy with regards to the provision of paid 

14 family and medical leave which is in force dur15 ing the taxable year, the applicable percentage 

16 of the total amount of premiums paid or in17 curred by such employer during such taxable 

18 year with respect to such insurance policy.’’, 

19 and 

20 (B) by adding at the end the following: 

21 ‘‘(3) RATE OF PAYMENT DETERMINED WITH22 OUT REGARD TO WHETHER LEAVE IS TAKEN.—For 

23 purposes of determining the applicable percentage 

24 with respect to paragraph (1)(B), the rate of pay25 ment under the insurance policy shall be determined 


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1 without regard to whether any qualifying employees 

2 were on family and medical leave during the taxable 

3 year.’’, 

4 (2) in subsection (b)(1), by striking ‘‘credit al5 lowed’’ and inserting ‘‘wages taken into account’’, 

6 (3) in subsection (c), by striking paragraphs (3) 

7 and (4) and inserting the following: 

8 ‘‘(3) AGGREGATION RULE.— 

9 ‘‘(A) IN GENERAL.—Except as provided in 

10 subparagraph (B), all persons which are treated 

11 as a single employer under subsections (b) and 

12 (c) of section 414 shall be treated as a single 

13 employer. 

14 ‘‘(B) EXCEPTION.— 

15 ‘‘(i) IN GENERAL.—Subparagraph (A) 

16 shall not apply to any person who estab17 lishes to the satisfaction of the Secretary 

18 that such person has a substantial and le19 gitimate business reason for failing to pro20 vide a written policy described in para21 graph (1) or (2). 

22 ‘‘(ii) SUBSTANTIAL AND LEGITIMATE

23 BUSINESS REASON.—For purposes of 

24 clause (i), the term ‘substantial and legiti25 mate business reason’ shall not include the 


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1 operation of a separate line of business, 

2 the rate of wages or category of jobs for 

3 employees (or any similar basis), or the ap4 plication of State or local laws relating to 

5 family and medical leave, but may include 

6 the grouping of employees of a common 

7 law employer. 

8 ‘‘(4) TREATMENT OF BENEFITS MANDATED OR

9 PAID FOR BY STATE OR LOCAL GOVERNMENTS.—For 

10 purposes of this section, any leave which is paid by 

11 a State or local government or required by State or 

12 local law— 

13 ‘‘(A) except as provided in subparagraph 

14 (B), shall be taken into account in determining 

15 the amount of paid family and medical leave 

16 provided by the employer, and 

17 ‘‘(B) shall not be taken into account in de18 termining the amount of the paid family and 

19 medical leave credit under subsection (a).’’, 

20 (4) in subsection (d)— 

21 (A) in paragraph (1), by inserting ‘‘(or, at 

22 the election of the employer, for not less than 

23 6 months)’’ after ‘‘1 year or more’’, and 

24 (B) in paragraph (2)— 


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1 (i) by inserting ‘‘, as determined on 

2 an annualized basis (pro-rata for part-time 

3 employees),’’ after ‘‘compensation’’, and 

4 (ii) by striking the period at the end 

5 and inserting ‘‘, and’’, and 

6 (C) by adding at the end the following: 

7 ‘‘(3) is customarily employed for not less than 

8 20 hours per week.’’, and 

9 (5) by striking subsection (i). 

10 (b) NO DOUBLE BENEFIT.—Section 280C(a) of the 

11 Internal Revenue Code of 1986 is amended— 

12 (1) by striking ‘‘45S(a)’’ and inserting 

13 ‘‘45S(a)(1)(A)’’, and 

14 (2) by inserting after the first sentence the fol15 lowing: ‘‘No deduction shall be allowed for that por16 tion of the premiums paid or incurred for the tax17 able year which is equal to that portion of the paid 

18 family and medical leave credit which is determined 

19 for the taxable year under section 45S(a)(1)(B).’’ 

20 (c) OUTREACH.— 

21 (1) SBA AND RESOURCE PARTNERS.—Each 

22 district office of the Small Business Administration 

23 and each resource partner of the Small Business Ad24 ministration, including small business development 

25 centers described in section 21 of the Small BusiVerDate Sep 11 2014 22:08 Aug 12, 2024 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8860.IH H8860

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1 ness Act (15 U.S.C. 648)), women’s business centers 

2 described in section 29 of such Act (15 U.S.C. 656), 

3 each chapter of the Service Corps of Retired Execu4 tives described in section 8(b)(1)(B) of such Act (15 

5 U.S.C. 637(b)(1)(B)), and Veteran Business Out6 reach Centers described in section 32 of such Act 

7 (15 U.S.C. 657b), shall conduct outreach to relevant 

8 parties regarding the paid family and medical leave 

9 credit under section 45S of the Internal Revenue 

10 Code of 1986, including through— 

11 (A) targeted communications, education, 

12 training, and technical assistance; and 

13 (B) the development of a written paid fam14 ily leave policy, as described in paragraphs (1) 

15 and (2) of section 45S(c) of the Internal Rev16 enue Code of 1986. 

17 (2) INTERNAL REVENUE SERVICE.—The Sec18 retary of the Treasury (or the Secretary’s delegate) 

19 shall perform targeted outreach to employers and 

20 other relevant entities regarding the availability and 

21 requirements of the paid family and medical leave 

22 credit under section 45S of the Internal Revenue 

23 Code of 1986, including providing relevant informa24 tion as part of Internal Revenue Service communica25 tions that are regularly issued to entities that proVerDate Sep 11 2014 22:08 Aug 12, 2024 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H8860.IH H8860

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1 vide payroll services, tax professionals, and small 

2 businesses. 

3 (d) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to taxable years beginning after 

5 the date of enactment of this Act. 

Æ 


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